A. Update
The Vietnam National Assembly officially approved the proposal and passed the Resolution No.69/2022/QH15 to increase the base salary from 1.49 million VND to 1.8 million VND for officials, public officials, and public employees. Thereby, Vietnam's base salary will officially increase to 1.8 million VND effective from July 1, 2023.
For workers who are paid on a daily or weekly basis, or based on a piece rate, then their salary, when converted to the monthly or hourly rate, must not be lower than the minimum wage. This change is applicable to workers and employers under labor contracts in accordance with the Labor Code.
Further the change will impact the capping for social security contributions.
| Insurance | Minimum Wage till June 30, 2023 | Minimum wage from 1st July 2023 |
|---|---|---|
| Social Insurance | 14,90,000 VND *20 times | 18,00,000 VND * 20 times |
| Health Insurance | 14,90,000 VND *20 times | 18,00,000 VND * 20 times |
| Voluntary Social Insurance | 14,90,000 VND *20 times | 18,00,000 VND * 20 times |
Maternity allowance (one-time allowance for childbirth or adoption) which is equal to 2 times of the base salary will also be increased from VND 2,980,000 to VND 3,600,000.
B. Statutory Compliance Release Date: February 07, 2023
C. Effective Date: July 01, 2023
A. Tax rates
As per Circular No. 111/2013/TT-BTC, employees having incomes from salaries, wages or equivalents to wages is obliged to pay PIT. For both Resident and Non-residents, the rates are defined based on two categories:
1. For employees with labor contract of more than 3 months
Tax-Residents follow progressive tax table as mentioned below:
| Income range (VND) From | Income range (VND) To | Rate |
|---|---|---|
| 0 | 50,00,000 | 5% |
| 50,00,000 | 1,00,00,000 | 10% |
| 1,00,00,000 | 1,80,00,000 | 15% |
| 1,80,00,000 | 3,20,00,000 | 20% |
| 3,20,00,000 | 5,20,00,000 | 25% |
| 5,20,00,000 | 8,00,00,000 | 30% |
| Above | 8,00,00,000 | 35% |
Tax non-residents follow flat rate of 20%
2. For individuals without labor contracts or with labor contracts less than 3 months
Tax-Residents follow flat rate of 10% and Tax-Non-Residents follow flat rate of 20%
B. Compulsory Insurances (SHUI) rates for Residents and Non-Residents
In Vietnam, Social Insurance (SI) and Health Insurance (HI) contributions are applicable to residents and non-residents. Whereas Unemployment Insurance (UI) contribution is applicable only to residents.
Below are the rate details for 2023
| No. | Types | For Vietnamese employees | For expatriates | ||
|---|---|---|---|---|---|
| Employee Contribution | Employer Contribution | Employee Contribution | Employer Contribution | ||
| 1 | Social Insurance (“SI”) | 8% | 17.50% | 8% | 17.50% |
| 1.1 | Maternity & sickness | 0% | 3% | 0% | 3% |
| 1.2 | Work accidents, occupational diseases | 0% | 0.5% | 0% | 0.5% |
| 1.3 | Death & retirement | 8% | 14% | 8% | 14% |
| 2 | Health Insurance (“HI”) | 1.5% | 3% | 1.5% | 3% |
| 3 | Unemployment Insurance (“UI”) | 1% | 1% | NA | NA |
| Total | 10.5% | 21.5% | 9.5% | 20.5% | |
In addition, base salary for SI and HI contribution is either contracted income or 20 times of the minimum wage rate (currently at VND 1,490,000/month) whichever is lower. Please note from 1 July 2023, the minimum wage for SIHI contribution will be increased to VND 1,800,000/month.
Base salary for UI contribution is contracted income or 20 times of the monthly regional minimum salary.
B. Statutory Compliance Release Date: January 1, 2023
C. Effective Date: January 01, 2023
https://vss.gov.vn:3535/File_Server_BHXH/documents/LawonHealthInsurancehopnhat.pdf
https://thuvienphapluat.vn/news/headlines/38875/rates-of-si-and-hi-contributions-to-be-paid-by-for-foreign-employees-in-2022
https://thuvienphapluat.vn/van-ban/Bao-hiem/Quyet-dinh-959-QD-BHXH-thu-bao-hiem-xa-hoi-y-te-that-nghiep-quan-ly-so-bao-hiem-the-bao-hiem-y-te-2015-293091.aspx
B. Update
Deputy Prime Minister Pham Binh Minh has approved a new Decree vide no. 38/2022/ND-CP to increase regional minimum wages by an average of 6 percent from July 1, 2022, after almost two and a half years due to the pandemic.
The increase varies from US$140 to US$202 depending on the living expenses in a particular region.
| Region | Current minimum wages (VND per month) | Minimum wages according to the Draft Decree (VND per month) | Increase (VND per month) |
|---|---|---|---|
| Region I | 4,420,000 | 4,680,000 | 260,000 |
| Region II | 3,920,000 | 4,160,000 | 240,000 |
| Region III | 3,430,000 | 3,640,000 | 210,000 |
| Region IV | 3,070,000 | 3,250,000 | 180,000 |
In addition, the Decree also ensures minimum hourly wage rates for the relevant regions. These are:
- Region I – VND 22,500 (US$0.97)
- Region II – VND 20,000 (US$0.86)
- Region III – VND 17,500 (US$0.75)
- Region IV – VND 15,600 (US$0.67)
For workers who are paid on a daily or weekly basis, or based on a piece rate, then their salary, when converted to the monthly or hourly rate, must not be lower than the minimum wage. This change is applicable to workers and employers under labour contracts in accordance with the Labour Code.
The geographical classification is determined based on the employer’s place of operation.
Region 1 covers Hanoi and Ho Chi Minh City's urban areas.
Region 2 encompasses Hanoi and HCM City's rural areas, along with major urban areas in the country like Can Tho, Da Nang and Hai Phong;
Region 3 covers provincial cities and the districts of Bac Ninh, Bac Giang and Hai Duong provinces; and
Region 4 comprises the rest of the country.
B. Statutory Compliance Release Date: June 12, 2022
C. Effective Date: July 01, 2022
A. Update
The Government pursuant to Article 2 of Decree 143/2018/ND-CP, hereby promulgates the Decree elaborating on Law on Social Insurance (SI) and Law on Occupational Safety and Hygiene regarding compulsory social insurance for employees who are foreign nationals working in Vietnam.
Accordingly, the updated changes for employer and employees as follows:
Employees who are foreign nationals working in Vietnam shall be required to participate in the compulsory SI program:
- They obtain work permits, practicing certificates, practicing licenses issued in Vietnam
- And they have indefinite-term employment contracts or employment contracts valid for at least one year with employers in Vietnam.
Foreigner employees shall be excluded if they are intra-company transferee’s, or they reach retirement age as Vietnam Labor Law.
Compulsory SI Benefits:
- Employees shall be entitled to the following compulsory SI benefits: sickness, maternity, occupational accident, disease, retirement and death insurance benefits.
- Compulsory SI benefits to which employees are entitled shall vary depending on the SI participation period under the provisions of this Decree.
SI contribution rates and methods at the employer side:
| Applicable Dates | Employer Contribution | ||||
|---|---|---|---|---|---|
| Social Insurance | Unemployment Insurance | Health Insurance | |||
| Retirement and death insurance benefit fund | Sickness and parental insurance benefit fund | Occupational accident and disease benefit fund | |||
| 1st Dec. 2018 to 30th June 2021 | 0% | 3% | 0.5% | - | 3% |
| 1st July 2021 to 31st Dec. 2021 | 0% | 3% | 0%* | - | 3% |
| 1st Jan. 2022 to 30th June 2022 | 14% | 3% | 0%* | - | 3% |
| 1st July 2022 onwards | 14% | 3% | 0.5% | - | 3% |
| Applicable Dates | Employee Contribution | ||||
|---|---|---|---|---|---|
| Social Insurance | Unemployment Insurance | Health Insurance | |||
| Retirement and death insurance benefit fund | Sickness and parental insurance benefit fund | Occupational accident and disease benefit fund | |||
| 1st Dec. 2018 to 30th June 2021 | 0% | - | - | - | 1.5% |
| 1st July 2021 to 31st Dec. 2021 | 0% | - | - | - | 1.5% |
| 1st Jan. 2022 to 30th June 2022 | 8% | - | - | - | 1.5% |
| 1st July 2022 onwards | 8% | - | - | - | 1.5% |
*Applied Resolution 68/NQ-CP 2021 from July 01, 2021 to June 30, 2022.
B. Statutory Compliance Release Date: December 22, 2021
C. Effective Date: January 01, 2022
A. Update
The Vietnamese Government has issued the Resolution No.116/NQ-CP for reducing the contribution rate of unemployment insurances and providing financial aid.
The unemployment insurance payment rate of employers to reduce from 1% of their wage funds to 0% for a duration of 12 months (01 October 2021 – 30 September 2022). This is for enterprises that are participating in unemployment insurance before 01 October 2021.
Provide financial aid from VND 1,800,000 – VND 3,300,000/person, depending on the UI contribution period during which unemployment benefits are not received. The financial aid shall be given from 01 October 2021 – 31 December 2021.
Employees entitled to the financial aid include:
- employees who are participating in unemployment insurance as of 30 September 2021 or
- have stopped paying unemployment insurance due to the termination of their labour contracts or working contracts between 01 January 2020 and 30 September 2021 and have unemployment insurance premium payment period reserved (except monthly old-age pensioners).
B. Statutory Compliance Release Date: September 24, 2021
C. Effective Date: October 01, 2021
116_NQ-CP.pdf
A. Update
The Vietnamese Government has issued the Resolution No.68/NQ-CP dated 01 July 2021 and Decision No.23/QD-TTg dated 07 July 2021 detailing and guiding the procedures for applying supporting policies.
1. Reducing the contribution rate to occupational, accidents and diseases insurances:
Employers are entitled to the contribution rate of 0% for occupational, accidents and diseases insurances in 12 months (from 01 July 2021 to 30 June 2022), which is applicable for employees who subject to occupational, accident and occupational disease insurances (except for government officers regulated in this Resolution).
The saving from the reduction of the contribution for such occupational, accidents and diseases insurances is for the company to fund for Covid-19 pandemic prevention for its employees.
2. Temporary suspension of contributions to the retirement and survivorship fund
Continue to suspend the contributions for the pension and survivorship fund for employer being impacted by COVID-19 pandemic similar to Resolution No. 42/NQ-CP dated 09 April 2020 and Resolution No. 154/NQ-CP dated 19 October 2020 of the Government (with a reduction from 15% of its employees contributing to social insurance comparing to April 2021). Decision 23/2021/QĐ-TTg provides detailed guidance on measurement of labor reduction for the pension and survivorship contribution fund.
The suspension of contributions for the pension and survivorship fund is six (06) months from the date of application, but does not exceed twelve (12) months for cases having applied Resoluion No. 42.
3. One-off allowance for the employees who suspense their employment contracts, take unpaid leave
The employees who suspense their employment contracts, take unpaid leave due to the temporarily cessation of employer’s operations upon the request of competent authorities for the prevention and control of the COVID-19 pandemic, is entitled to the below one-off allowance if they qualify the conditions regulated in Resolution No. 68/NQ-CP issued dated 01 July 2021:
From fifteen (15) consecutive days but less than one (01) month: VND 1,855,000/person; or From one (01) month and above: VND 3,710,000/person.
Pregnant female employee is entitled to VND1,000,000/ person and female employee raising child less than 06 years old has VND 1,000,000/child in addition to the above.
4. One-off allowance for employees who are under the time of furlough
Employees working under a form of employment contract is entitled to an one-off allowance of VND 1,000,000/person if they have been put on furlough under Clause 3, Article 99 of the Labor Code, and have been quarantined or in locked down areas as required by the competent authority.
Pregnant female employee receive VND1,000,000/ person and female employee raising child less than 06 years old receives VND 1,000,000/child in addition to the above.
5. One-off allowance for employees who terminate their employment contracts
The employee contributing for social insurance not qualifying unemployment allowance is entitled to a one-off allowance of VND 3,710,000/person upon termination of their employment due to business suspension for the prevention and control of the COVID-19 pandemic.
Pregnant female employee receive VND1,000,000/ person and female employee raising child less than 06 years old receives VND 1,000,000/child in addition to the above.
B. Statutory Compliance Release Date: July 07, 2021
C. Effective Date: July 01, 2021
A. Update
The Government has issued Decree No. 145/2020/ND CP for guidance on some regulations of the Labor Code related to working conditions and labor relationship (“Decree 145”). Following are the changes impacting payroll calculations:
| # | Particulars | New Decree |
|---|---|---|
| 1. | Amending the basis of salary for calculation of unused annual leave for terminated employees | The employers have responsibility to pay income relating to unused annual leave for the employees in the event of job loss, resignation or employment cessation due to other reasons. The basis of salary for calculation of unused annual leave compensation is the salary of the month prior to the month that employees resign or loss the job as agreed in the labor contract. |
| 2. | Probation period will be considered when calculating the job-loss allowance/ severance allowance pay | In case the employee worked regularly for the employer from 12 months or more, the employer is responsible to pay job-loss allowance/ severance allowance in accordance with the Labor Code. The actual time worked that the employee has worked for the employer when calculating the job-loss allowance/ severance allowance pay, includes:
|
B. Statutory Compliance Release Date: December 24, 2020
C. Effective Date: February 01, 2021
A. Update
As per the Official letter No. 03/BHXH-QLT, the exchange rate of VND 23,131/USD shall be applicable till the end of the first 6 months on 2021.
The exchange rate is determined based on the inter-bank average exchange rate announced by the State Bank of Vietnam. The payment of salaries, bonus and allowances in labor contracts in foreign currency is only accepted with regard to foreign workers.
B. Statutory Compliance Release Date: January 07, 2021
C. Effective Date: January 04, 2021
A. Update
Due to COVID-19, The Department of Taxation of Ha Noi city vide circular no. 97748/CT-TTHT have clarified that in case the Company incurs quarantine expenses for the foreigners arriving in Vietnam for the purpose of employment, who are undergoing quarantine in accordance with the applicable regulations then such expenses shall be included in PIT taxable incomes of the individual, if the name of the recipient is specified.
B. Statutory Compliance Release Date: November 19, 2020
C. Effective Date: November 22, 2020
A. Update
The Standing Committee of the National Assembly has issued the official Resolution 954/2020/UBTVQH14 on adjustment of the Personal Income Tax Relief rates, specifically as following:.
- The personal relief is VND 11 million/ taxpayer/ month (VND 132 million/ taxpayer/ year);
- The dependent relief is VND 4.4 million/ qualified dependent/ month
The Resolution will be applicable for the tax year 2020. For individuals who temporarily paid tax liabilities based on the current tax relief rates (9 million VND/ taxpayer/ month and VND 3.6 million/ dependent/ month), their annual taxable income shall be subject to the new tax relief rates when conducting 2020’s year-end personal income tax finalization.
